We are studying 30 women 65-75 years of age treated for 2 y with constant oral estrogen/low dose daily progestin (ERT) and 30 age-matched BLSA controls for bone loss (DEXA) and biochemical indices of bone turnover, plasma lipids, anthropometric indices, DEXA measures of body fat, and vaginal maturation indices. Mood, symptoms of estrogen deficiency, and side effects of hormone replacement therapy are assessed. Minor breast tenderness and vaginal bleeding are the only adverse effects observed. Treated women showed a 3.8% decrease in total cholesterol (NS) with a 16% increase in HDL and a 17% decrease in LDL (both p<0.001), and no significant change in plasma triglycerides. DEXA scans revealed a decrease in percent body fat (p<0.03) and increases in lean body mass (p<0.03) and bone mineral density (lumbar spine +7%; femoral trochanter +9%, both p<0.01). Data suggest that ERT in older postmenopausal women improves metabolic function and results in favorable changes in body composition. We find a favorable risk/benefit ratio for ERT in older postmenopausal women.